Business Service Centers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,300 business service centers in the US offer mailbox, parcel handling, and document processing services to individuals and business customers. The mailbox rental segment provides private mailboxes, packing, shipping, and notary services, and sells mailing and office supplies. The copy centers segment offers document printing, copying, and facsimile services, as well as word processing, and on-site computer rental.
Competition from Large Office Supply Chains
Business service centers have seen increased competition from large office supply store chains.
E-Commerce Drives Growth in Parcels and Returns
The growing popularity of online shopping has resulted in a surge in parcel growth delivery to businesses and consumers, accompanied by a surge in returns.
Industry size & Structure
The average business service center employs fewer than 10 workers and generates almost $2 million annually.
- The US business service centers industry (including copy shops) includes about 6,300 firms that operate over 10,300 facilities, employ 81,000 workers, and generate annual revenue of about $12 billion.
- The US industry is concentrated: the top 50 companies account for about 60% of revenue.
- Large companies include The UPS Store (5,100+ locations), FedEx Office and Print Services (2,200+ locations), and AlphaGraphics (250+ US locations).
- Many mailbox rental firms and copy centers/shops are franchises of large national chains.
Industry Forecast
Business Service Centers Industry Growth
Recent Developments
Dec 4, 2024 - Office Market Shows Signs of Improvement
- The US office market posted higher net absorption in the third quarter, and vacancy rates remained steady, perhaps signaling that demand for office space has hit bottom and is back on the upswing, according to a recent report by the real estate firm CBRE. Net absorption in Q3 hit 4.3 million square feet – up about 87% from Q2 2024 – which marked the second consecutive quarter of increasing office space demand. Absorption also exceeded the 3.5 million square feet of new office space that came online in Q3 2024. The office vacancy rate in Q3 2024 was unchanged at 19%, a positive signal after nine quarters of rising vacancies. Third-quarter leasing activity decreased slightly from Q2 2024 but rose more than 11% over Q3 2023. Higher office occupancy could increase demand for business service centers.
- In November, the US Postal Service (USPS) announced plans to increase prices for various shipping services on January 19, 2025. The USPS noted that the price increases aim to improve revenue while remaining competitive. The rates charged by USPS are generally lower than those of private couriers UPS and FedEx, and the agency hopes to win market share from the two delivery firms, according to Supply Chain Dive. Affected services include Priority Mail, Priority Mail Express, Ground Advantage, and Parcel Select.
- In October, the National Federation of Independent Businesses’ (NFIB) Small Business Optimism Index rose 2.2 points to 93.7 but remained below the 50-year average of 98. At 23%, inflation was the most significant problem respondents said they face. About 35% of those surveyed said they had job openings they were having difficulty filling. The percentage of businesses that expect better business conditions in six months rose five percentage points to a net-negative 4%, marking the highest reading of 2024. NFIB Chief Economist Bill Dunkelberg said, “With the election over, small business owners will begin to feel less uncertain about future business conditions. Although optimism is on the rise on Main Street, small business owners are still facing unprecedented economic adversity. Low sales, unfilled job openings, and ongoing inflationary pressures continue to challenge our Main Streets, but owners remain hopeful as they head toward the holiday season.”
- In September, Amazon’s CEO announced that starting January 2, 2025, the company’s corporate staff would have to return to the office full time, according to The Wall Street Journal. Since the end of the pandemic, hybrid work models have persisted, often due to management concerns that top performers might leave if they were required to spend more time in the office. However, as the labor market has tightened, the balance of power has shifted to favor employers, and some are eager to use their upper hand to require five days of in-office work. However, over the last year, the number of companies requiring five days in the office has fallen by 15%, according to Flex Index, which tracks the work policies of about 6,300 firms. A recent survey of CEOs by KMPG showed that 80% expect corporate employees to return to the office five days per week within three years. More firms returning to five-day in-office schedules could boost demand for business service centers.
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